Co-operative Business Model A
The co-operative business model was established by the International Co-operative Alliance.
The Rochdale Pioneers
Co-operatives started out as small grassroots organizations in Western Europe, North America and Japan in the middle of the nineteenth century. However, it is the Rochdale Pioneers that are regarded as the prototype of the modern co-operative society and the founders of the Co-operative Movement.
In 1844 a group of 28 artisans working in the cotton mills in the town of Rochdale, in the north of England, established the first modern co-operative business, the Rochdale Equitable Pioneers Society. The weavers faced miserable working conditions and low wages, and they could not afford the high prices of food and household goods. They decided that by pooling their scarce resources and working together they could access basic goods at a lower price. Initially, there were only four items for sale: flour, oatmeal, sugar and butter.
The Pioneers decided it was time shoppers were treated with honesty, openness and respect, that they should be able to share in the profits that their custom contributed to and that they should have a democratic right to have a say in the business. Every customer of the shop became a Member and so had a true stake in the business. At first the co-op was open for only two nights a week, but within three months, business had grown so much that it was open five days a week.
The principles that underpinned their way of doing business are still accepted today as the foundations upon which all co-operatives operate. These principles have been revised and updated, but remain essentially the same as those practiced in 1844.
STATEMENT ON THE CO-OPERATIVE IDENTITY
A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.
Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative Members believe in the ethical values of honesty, openness, social responsibility and caring for others.
The co-operative principles are guidelines by which co-operatives put their values into practice.
1st Principle: Voluntary and Open Membership
Co-operatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of Membership, without gender, social, racial, political or religious discrimination.
2nd Principle: Democratic Member Control
Co-operatives are democratic organizations controlled by their Members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the Membership. In primary co-operatives Members have equal voting rights (one Member, one vote) and co-operatives at other levels are also organized in a democratic manner.
3rd Principle: Member Economic Participation
Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of Membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting Members in proportion to their transactions with the co-operative; and supporting other activities approved by the Membership.
4th Principle: Autonomy and Independence
Co-operatives are autonomous, self-help organizations controlled by their Members. If they enter to agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their Members and maintain their co-operative autonomy.
5th Principle: Education, Training and Information
Co-operatives provide education and training for their Members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public — particularly young people and opinion leaders — about the nature and benefits of co-operation.
6th Principle: Co-operation among Co-operatives
Co-operatives serve their Members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
7th Principle: Concern for Community
Co-operatives work for the sustainable development of their communities through policies approved by their Members.